United States Department of Agriculture
Department Bulletin No. 1246
By W. C. Davis, Investigator in Marketing Livestock and Meats, and C. V.
Whalin, Specialist in Marketing Livestock and Meats,
Bureau of Agricultural Economics.
DEFINITION OF CLASSIFYING AND GRADING
Classifying and grading a commodity consists merely in dividing it into lots or groups which have similar and uniform characteristics, and which show minimum variations in the essential factors which distinguish the group from other groups. It is an analytical process, going from the general to the particular, a grouping of individual units in such a way that they present the greatest uniformity possible.
Classifying and grading are complementary terms. Both are a part of the same general process, but classification precedes grading. For example, all beef is first divided into a number of large units, such as steer beef, cow beef, bull beef, etc. These general units are called classes. That done, each class is still further subdivided into smaller and more specific groups, such as prime steer beef, good steer beef, medium steer beef, etc. These smaller units are called grades.
PURPOSE OF CLASSIFYING AND GRADING
The main purpose of classifying and grading beef, as is true of any other commodity, is to make possible a determination of values. When a large quantity, made up of many units varying widely in several important respects is considered, it is impossible to measure accurately the excellence or deficiency of the lot as a whole; consequently it is imposssible to determine its true value.
For example, beef carcasses vary so much in quality, weight, and many other respects that one carcass may be worth $100 and another $20. A certain portion of beef may be worth 40 cents a pound and another 15 cents a pound. It is apparent, therefore, that to determine the value of a lot of beef it is necessary to group the units making up the lot in such a way that in a given group the variations between the units are so slight that they are negligible. That done, the degree of excellence or deficiency can readily be determined, and it is on this that market values depend.
Having determined the market value, it still remains to provide machinery for conveying the idea or concept of values to another ; in other words, for quoting prices. To accomplish this, certain labels or names must be formulated with which to designate degrees of excellence or deficiency, and a standard of values agreed upon.
It is impossible, for example, to quote a price on “beef” be-cause such a quotation would convey practically no information. A price quoted on “good grade steer beef,” however, is intelligible and informative, provided both parties understand what is meant by “good grade” and “steer.” When such a condition exists, classifying and grading have been accomplished.
PURPOSE OF STANDARD CLASSES AND GRADES
There are times during the progress of almost any commodity from producer to consumer when it is either inconvenient or impossible for the buyer to inspect either personally or through an agent, the commodities he wishes to buy. Therefore, in order that persons may trade with one another in a given commodity, it is necessary first to draw up a code of rules for classifying and grading the commodity according to a certain standard and second to formulate a set of terms the meaning of which is definitely fixed and generally understood. It is essential that both the buyer and seller use the same terms to describe a given article and that both attach the same meaning to the terms used. When this usage becomes widespread and permanent we have a standard classification or system of grading which facilitates purchasing, lessens the volume of waste products to be handled by the middleman, and therefore improves the market for the producer.
If, for example, a retailer in New York City could buy beef in Chicago by merely specifying the class and grade desired, and could have reasonable assurance that he would obtain precisely what he wants, this would go a long way toward simplifying the present rather elaborate scheme of distribution. Economies would be effected, and the cost of distribution could be materially reduced.
So far as is known, no serious attempt to collect, organize, define, interpret and harmonize the various trade names and terms used in the United States to describe market classes and grades of livestock and dressed meats had been made until early in the present century. The task was undertaken by the Agricultural Experiment Station of the University of Illinois, under the leadership of Prof. Herbert W. Mumford, assisted by Prof. Louis D. Hall and others. Thorough investigations were conducted both at the experiment station and on the Chicago market, and these investigations were reported in a series of bulletins.
When the Bureau of Markets, now the Bureau of Agricultural Economics, inaugurated its market reporting service on live-stock and dressed meats in 1917, these publications of the University of Illinois were used as a basis for formulating a standard classification of market classes and grades for use in reporting prices and trade conditions. Using this classification as a basis, the bureau has elaborated a complete classification of livestock and dressed meats and this complete classification will be described in a series of bulletins of which this is the first.
For many years, some business in dressed beef has been done on the basis of specifications, but in most instances such trans-actions have been based largely on class, the grade being indicated in only the most general terms. For that reason this plan has not, as a rule, been successful, and the great bulk of beef is still personally inspected before purchase.
That at least some progress along the line of buying meat on specifications is possible is indicated by the fact that in 1923 the Emergency Fleet Corporation purchased hundreds of thousands of pounds of meat weekly for use on Shipping Board vesselswholly on specifications. Although all meat was inspected for grade by a Government inspector before it was finally accepted, the fact that for days at a time the inspector made no rejections, and that, on the whole, probably 99 per cent of the meat offered was accepted, demonstrates rather conclusively that it is entirely possible, under a standard system of classifying and grading, for the purchaser to make his specifications so clear and exact that the seller has little or no difficulty in understanding what is wanted.